We asked three Motley Fool contributors to name high-growth stocks that are just getting started. They came up with Guardant Health (NASDAQ: GH), Huya (NYSE: HUYA), and Beyond Meat (NASDAQ: BYND). ....
This streaming company is posting explosive growth
Keith Noonan (Huya): To say that Chinese tech stocks aren't a popular play at the moment would be an understatement. After comments from President Trump in April suggesting that significant progress had been made on a trade agreement with China, the outlook for a deal has since taken a significant turn for the worse and raised concerns that growth for the world's second-largest economy will continue to slow.
What's more, the overall digital advertising industry appears to be going through a bit of a shake-up, and this has had a significant impact on many of China's internet stocks. So there's no shortage of potential complicating factors for investors to weigh at the moment, but there are still Chinese tech companies that are expanding at a rapid clip and have a long runway for growth. Huya looks to be one of them.
Huya's business revolves around allowing users to broadcast themselves playing video games or watch broadcasts from other users. The company primarily generates revenue by taking a cut of donations that viewers make to the streamers, a model that's similar to that of Amazon.com's Twitch service. The viewer-donation-based business accounts for more than 90% of Huya's sales, is growing at a rapid clip, and means that the company is pretty insulated from shifts in the digital advertising market. What's more, while other streaming video companies are spending big to create original content and license movies and television shows from other creators, Huya has very little in the way of up-front content costs.
The company is seeing strong momentum across its core engagement metrics, with daily average users climbing 33% year over year last quarter and total paying users climbing 57%.The earnings report delivered 93% year-over-year sales growth, marking its fifth consecutive quarter in which revenue roughly doubled versus the prior-year period, and adjusted net income for the quarter climbed roughly 94%.
Gaming-video content has exploded in popularity over the last decade, the audience for video game live-streams continues to get bigger each day, and Huya is in good position to capitalize on favorable industry trends even as trade tumult is casting uncertainty over the broader Chinese tech space. ....